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Merchandise woes dampen Pets at Home revenue rise

By Ravender Sembhy

Pets At Home, which has 10 stores in Northern Ireland, has said "subdued trading" at its merchandise division dragged on sales in the third quarter.

Revenue at the retailer rose 4.4% to £203.7m in the 12 weeks to January 5, with its services division, which includes veterinary and pet grooming services, seeing comparable sales growth of 7%.

However, like-for-like merchandise sales dipped 0.5%.

Boss Ian Kellett said: "With a quarter to go, our profit outlook for the year remains in line with expectations, reflecting both the continued investment in our customer offer and ongoing efficiency initiatives.

"Our focus on becoming more specialist and doing the right thing for our customers remains at the forefront of our strategy."

Late last year, the company warned that trading was softening, although yesterday it confirmed it was still on course to meet full-year profit expectations.

Across the group, like-for-like revenue grew 0.1%.

The firm said it was on track to open 15 to 20 superstores, 45 and 55 vet practices and 50 to 60 grooming salons in 2017.

Mr Kellett added: "Vet services yet again performed strongly this quarter, where our strategy of providing a quality service to clients across both primary opinion and specialist referral centres is delivering results and is a platform for continuing strong growth."

But Wayne Brown, analyst at Liberum, said: "We view the results as disappointing.

"The material slowdown in merchandise reflects the challenges that remain in this division.

"The fact online growth has been strong yet like-for-like sales are negative in merchandise could be a signal of structural issues and a highly competitive marketplace."

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